nbn™ scoreboard: miracle needed to hit FY 18 construction targets

Fastest-ever adoption and connection rate needed, but at least finances look decent

nbn™, the organisation building and operating Australia's national broadband network, last week released its third quarter results. And as is now our practice at Vulture South, we’ve shoved its numbers into our nbn™ scoreboard – the table we use to compare assumptions from the nbn™’s corporate plan (PDF) with its latest results.

For FY 2018’s third quarter we can see the impact of the halt of the hybrid fibre-coax (HFC) rollout beginning to bite as just 336,330 new premises were activated in days between January 1st and March 31st 2018.

nbn™ expected to just over a million new activations in the first half of calendar 2018 – how it will get another 600,000-odd done in 90 days given new HFC connections are only available in limited areas is anyone’s guess.

The gap between premises ready for service and activated premises means that if massive adoption happens in Q4, it could reach its target for users. But takeup was slow in Q1. Perhaps things will pick up in Q4 as PSTN connections are no longer offered in some parts of Australia, but it is hard to see a doubling of adoption in Q4.

Perhaps because of the HFC mess or perhaps for other reasons, nbn™’s capital expenditure is below expectations. And average revenue per user shows no signs of heading higher, probably a legacy of last year’s wholesale discounting to get users onto higher speed tiers/

Here’s a look at the metrics that matter.

Metric Corporate plan forecast Q3 2018 actual Comment
FTTP brownfields connection cost $4,400 $4,396 Up $4 since last quarter. Inflation means effectively a reduction
FTTP greenfields connection cost $2,100 $2,263 Down $1 since last quarter but still above forecast
FTTN connection cost $2,300 $2,225 Up $3 since last quarter
HFC connection cost $2,300 $2,404 Up $1 since last quarter
Fixed wireless connection cost $4,900 $3,698 Up $53 since last quarter. Doing harder sites now? Still under budget overall
Revenue $1.9bn $521m Year-to-date total of 1.$41bn means FY 18 target of $1.9bn looks safe
Operating expenses 2.4bn $1.55bn Spend for 9 months to March 31 suggests nbn™ may do better than forecast!
Capital expenditure $7.0bn $4.246bn 3/4 into FY 18 and nbn™ has almost 30% of its planned capex unspent. Hmmm
Premises activated 4.4m 3,722,690 336,330 new premises activated in the last 90 days, looks like this will be an annual miss. Damn that HFC mess!
Premises ready for service 8.7m 7,507,907 1.2m connections in a quarter? Ain't gunna happen
Average revenue per user $52 in 2021 $44 Up a buck over a year

nbn™ also released data on network congestion and customer service issues. The latter shows that something happened in April 2018 to make installations more likely to work on the first attempt, with a jump from 87 per cent to 91 per cent. The company also said congested times on its networks fell to 18 minutes a day.

nbn™ stats Q3 2018

nbn™ customer service and speed data. Click to enlarge

The Register has long argued that this kind of metric is nice, but also reflects problems that could and should have been anticipated.

We’ll be back in three months with the next nbn™ scorecard! ®

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